Languages

Import and local polyolefin prices in Indonesia have witnessed a new round of increases this week, with sellers attributing the uptrend to strong crude oil futures along with expectations of an improvement in demand ahead of the Ramadan month...

Although there were several bearish factors pushing players to hold softer expectations, a major Taiwanese producer’s decision to cut its April PVC prices to China and India sharply caught most Asian players by surprise...

In the Middle East, March PE offers from the regional suppliers emerged with rollovers to increases amid higher energy and upstream costs. However, rising costs have failed filter through the March prices in African PE markets, where prices remained stable or decreased from February...

In China and Southeast Asia, import PS prices have maintained their stable to slightly firmer trend which has been mostly in place since the markets hit a more than one-year low in around early December...

will be removed from the following:My FavoritesMy NewsMy DashboardNotification Settings

Do you confirm?

Longest imbalance between China’s and Turkey’s PP markets

According to ChemOrbis Price Wizard, Turkey’s PP market has traded at par with or under China for the large part of the second half of 2016, which is marked as the longest imbalance between the two markets.

Under balanced market conditions, Turkey should carry some premium over China due to its smaller market share and freight difference. In the past, this imbalance frequently occurred but the markets corrected themselves usually within one to two weeks.

However, since the failed coup attempt in Turkey in mid-July, the two markets have not come back into balance, disregarding a few weeks in October, as can be seen from the graph below.

Rather than the netback to China, demand has been setting the price for the second half of 2016 in Turkey. Although both markets have moved in the same direction, Turkey’s PP market has not faced its usual correction, failing to move back above China to regain its premium. Turkish buyers have apparently resisted the price increases necessary for bringing the Turkish PP market back into balance with China.

In the meantime, Turkey’s PP market is not contracting. ChemOrbis Import Statistics reveal that the cumulative imports of the first 10 months of 2016 are up by more than 5% year-on-year.

On the contrary, China’s homo PP imports shrank by 15% in January-October on a yearly basis, according to ChemOrbis Import Statistics. The country has been adding new domestic PP capacities for the past few years while there are also more to come in the years ahead.

In conclusion, the question arises as to whether this imbalance can be a new norm in setting the price in Turkey’s PP market. The size of Turkey’s PP market still corresponds to half of China’s import market; however, will sellers’ arguments about shifting their allocations to China for better netbacks be as valid as before to determine a price in Turkey? Particularly when China continues to add new PP capacities on the path to becoming self-sufficient?

Plastics Industry Notifications

Do you want to be the first to know about developments affecting the plastics industry and polymer prices?
All you have to do is click "Allow" on your browser and start receiving push notifications immediately!